In 2007, then-Environmental Protection Agency Administrator Stephen Johnson denied California and Arizona, Connecticut, Maine, Maryland, Massachusetts, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and New Jersey -- the right to set their own clean air standards, despite staff scientists' recommendation to do so.

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"California has shown bold and bipartisan leadership through its effort to forge 21st-century standards, and over a dozen states have followed its lead. But instead of serving as a partner, Washington stood in their way," Obama said.

Obama also signed a memorandum directing the Department of Transportation to expedite finalization of more fuel-efficient standards for the auto industry to cover 2011 model-year cars.

Last May, the Bush administration informally proposed increasing the standard to an average of 27.8 miles per gallon on average fuel economy standards for passenger cars and light trucks for models 2011 through 2015, and Obama will likely increase that.

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Flanked by Transportation Secretary Ray Lahood and EPA administrator Lisa Jackson, Obama described U.S. dependence on oil as "one of the most serious threats that our nation has faced," comparing it to the dangers of dictators and terrorists.

"For the sake of our security, our economy and our planet, we must have the courage and commitment to change," Obama said at the event held in the East Room of the White House. "We need more than the same old empty promises."

The final EPA decision could take several months, but it's a step toward allowing states more freedom in guiding their path to environment standards.

The president also pushed his American Recovery and Reinvestment Plan, saying that it would "save taxpayers $2 billion a year by making 75 percent of federal buildings more efficient."

Both of Obama's memoranda are written with cautious legalese and assiduous attention to process. But however soft they may seem, they are expected to lead to dramatic changes in environmental policy from the Bush administration.

In 2007, Congress passed the Energy Independence and Security Act, designed to create more energy independence and security in the United States, ramp up production of clean renewable fuels and improve energy efficiency. But environmentalists criticized the Bush administration for not doing enough to follow through on these goals.

Reaction to Obama's Moves

Obama's move today paves the way for states to eventually impose much stricter fuel emissions standards and for the federal government to require that U.S. automakers produce far more fuel-efficient cars and trucks much quicker than Bush would have required them to do so.

Given that these states -- especially California -- command a large market share, allowing states to set their own standards is likely to have a significant impact on the U.S. economy.

The reversal received a mixed reaction.

As expected, environmental groups hailed the announcement as a "thrilling moment," and one that will leave "behind our failed fossil fuel policies."

Florida Gov. Charlie Crist, a moderate Republican, applauded Obama's request to Jackson, even though Florida is not one of the states in line to get a waiver, but he added that "The waiver is a critical aspect for California, Florida and 17 other states which have adopted, or are in the process of adopting, automobile emissions standards."

California Republican Gov. Arnold Schwarzenegger also praised the move, saying in a written statement that, "With this announcement from President Obama less than a week into his administration, it is clear that California and the environment now have a strong ally in the White House. Allowing California and other states to aggressively reduce their own harmful vehicle tailpipe emissions would be a historic win for clean air and for millions of Americans who want more fuel-efficient, environmentally friendly cars."

California sought to reduce greenhouse gas emissions from passenger vehicles by 30 percent by 2016, but its request for a waiver was rejected by the former Republican administration.

"The president's action today is disappointing," Boehner said. "The effect of this policy will be to destroy American jobs at the very time government leaders should be working together to protect and create them. Millions of American jobs will be placed in further jeopardy if automakers are forced to spend billions to comply with potentially dozens of different emissions standards in dozens of different states."

The U.S. Chamber of Commerce also criticized Obama's memoranda.

"At a time when we need to jump start our economy, regulating CO2 in this manner would stop most of President Obama's stimulus proposal cold in its tracks and create a regulatory train wreck," William Kovacs a vice president at the U.S. Chamber of Commerce, said in a statement. "In addition, such a move would put the EPA one step closer to making carbon dioxide 'subject to regulation' under the Act. This would ... have the unintended consequence of creating costly and burdensome permitting requirements on millions of construction projects, including hospitals, schools, and office buildings."

Obama's memoranda today bear few surprises. The president has reiterated that energy and environment issues will be a top priority in his administration, and today's actions affirm he will invest some of his time and political capital into this issue.

"He feels the need to get moving in some areas where he thinks things can be done relatively soon," said Michael A. Levi, senior fellow for energy and environment at the Council of Foreign Relations.

But Obama's push to create more fuel-efficient cars domestically and boost the economy through his stimulus package comes at a time when automakers continue to struggle to keep their operations and layoffs continue to deter the financial climate.

In Detroit, the hub of U.S. auto manufacturers, the reaction was mixed, with some saying that auto companies need to make this happen and others arguing that manufacturers would be forced to pass down the costs of meeting these regulations to consumers.

Just two months after the Big 3 automakers came to Washington, D.C., requesting a bailout and promising more fuel-efficient vehicles, the state of automakers remains weak. General Motors said today that it will cut 2,000 jobs at plants in Michigan and Ohio because of slow sales. Changing its strategy so it falls in line with the government may not be as easy as in a better financial climate.

Job cut announcements -- some of which Obama addressed -- also flowed in today. Home Depot Inc. said it plans to eliminate 7,000 jobs while closing four dozen of its smaller home improvement stores. Sprint Nextel Corp. said it is eliminating about 8,000 positions as it seeks to cut annual costs by $1.2 billion.

Obama, who is also in the process of pushing his stimulus plan, met with Republican leaders last week to discuss the economic package. But despite the bipartisan approach, Obama showed there were clear limits.

And Monday, in another symbolic turn from the Bush administration, Obama appointed as his special envoy for climate change Todd Stern, the U.S. negotiator on the Kyoto Protocol agreement that the Bush administration withdrew from in 2001.

In a subtle criticism of presidents past, Obama stated in his remarks today that alarms about energy dependency have been sounded, but that no concrete measures have been taken.

"Year after year, decade after decade, we've chosen delay over decisive action. Rigid ideology has overruled sound science. Special interests have overshadowed common sense. Rhetoric has not led to the hard work needed to achieve results," he said. "Our leaders raise their voices each time there is a spike in gas prices, only to grow quiet when the price falls at the pump."

But despite his early steps, going beyond rhetoric may be a challenge for the new administration as well.

"I'll be looking to see whether the president can use his ability to communicate in order to build the political support that's necessary to do what we've known for long that are important," Levi said. "Ultimately, big steps to change the way we use energy are going to require tough decisions from congressmen, and those are not going to happen without presidential leadership."

With a myriad of issues -- from the economy to two wars abroad -- facing the newly minted president, it remains to be seen how Obama's energy and environmental agenda will unfold in the coming years.